Fill in the blanka. Goodwill is impaired if the (fair value is greater than carrying value or fair value is less than caring value)

On January 1, Prine, Inc., acquired 100 percent of Lydia Company's common stock for a fair value of $135,847,030 in cash and stock. Lydia's assets and liabilities equaled their fair values except for its equipment, which was undervalued by $590,000 and had a 10-year remaining life. Prime specializes in media distribution and viewed its acquisition of Lydia as a strategic move into content ownership and creation. Prine expected both cost and revenue synergies from controlling Lydia's artistic content (a large library of classic movies) and its sports programming specialty video operation. Accordingly, Prine allocated Lydia's assets and liabilities (including $64,471,000 of goodwill) to a newly formed operating segment appropriately designated as a reporting unit. The fair values of the reporting unit's identifiable assets and liabilities through the first year of operations were as follows. Fair Values Account 1/1 12/31 Cash 287,000 $ 100,500 Receivables (net) 547,000 1,117,500 Movie library (25-year remaining life) 41,700,000 68,680,000 Broadcast licenses (indefinite remaining life) 15,450,000 28,280,000 Equipment (10-year remaining life) 20,830,000 19,240,000 Current liabilities (518,000) (890,000) Long-term debt 6,920,000) (6,710,000) However, Lydia's assets have taken longer than anticipated to produce the expected synergies with Prine's operations. Accordingly, Prine reviewed events and circumstances and concluded that Lydia's fair value was likely less than its carrying amount. At year-end, Prine reduced its assessment of the Lydia reporting unit's fair value to $127,898,000 At December 31, Prine and Lydia submitted the following balances for consolidation. There were no intra-entity payable on that date. Prine, Inc. Lydia Co. Revenues $ (26,800,000) (18,400,000) Operating expenses 12,000,000 15,700.000 Equity in Lydia earnings (2,641,000) Dividends declared 300,000 100.000 Retained earnings, 1/1 (64,500,000) 3,286,000) Cash 798,000 100.500 Receivables (net) 332,500 1,117,500 Investment in Lydia 138,388,000 Broadcast licenses 375,000 14,810.000 Movie library $57,500 16.800,000 Equipment (net) 143,800,000 9.200.000 Current liabilities (910,000) (762.000) Long-term debt (26,700,000) 7.880.000] Common stock 100.000 167.500.000